So let me begin with some of the unusual items that drove the quarter's results. First, I want to give you the thinking behind the largest item for the financial note, the goodwill charge. Next I want to give you some perspective on expense levels, as you will notice, that expenses ran higher in the fourth quarter. Finally, I need to provide you with some perspective on tax in the quarter and for the year, as without understanding this nuance, one could wrongly conclude that our underwriting was worse that it in fact is.First, about the goodwill charge. As you well know, the P&C insurance sector is continuing to trade at low valuations, and XL is traded at an even greater discount. When these conditions persist long enough, we must closely examine the goodwill we carry, in relation to the purchase of these operations. In our third quarter 10-Q, we described that this examination was intensified. When the fourth quarter showed higher levels of non-cat loss activity, as had the third quarter. We felt that our assessment of how the market would value these operations had to reflect these recent poor results, even if we remain bullish about our potential over time.
XL Group Plc's CEO Discusses Q4 2011 Results - Earnings Call Transcript
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